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Cathie Wood&Arkk:
The financial markets are made up of various market participants. These entities form the overall market ecosystem and range from small retail traders to large asset management companies, prop trading desks, and fund houses. In this article, we are going to talk about Cathie Wood and her investment management firm “Ark Invest”. Ark Invest is an investment management firm that manages several exchange-traded funds and has been delivering stellar returns on a consistent basis. Based out of New York City, Ark Invest was founded by Cathie Wood in 2014, and since then, it has amassed over $52 billion in combined assets under management. The Ark Innovation ETF is one of their best performing funds and has been outperforming the markets for quite some time. 
Who is Cathie Wood?

Catherine Duddy Wood or better known as Cathie Wood is the founder, CEO, and CIO of Ark Invest. Named as the best stock picker of 2020 by Bloomberg News, Cathie Wood is a prominent name in the world of finance. In March of 2021, two of Cathie Wood’s funds were featured on the list of the ten largest female-run funds. Her investment management firm also boasts of managing the largest actively traded fund; the ARK Innovation ETF.

Cathie Wood was born in Los Angeles on the 26th of November, 1955. Her parents were immigrants from Ireland where her father served in the Irish Army and later in the United States Air Force. Cathie’s father was a radar system engineer and his detail-oriented nature inspired Cathie to discover connections between things. She attended school at the Notre Dame Academy in Los Angeles and graduated in 1974. Soon, Cathie went on to pursue her higher education from the University of Southern California and graduated in 1981 with a Bachelor of Science degree in finance and economics. 

ARK Investment Management LLC is an investment management firm that was founded by Cathie Wood in 2014. Based in New York City, Ark Invest manages several exchange-traded funds and has over $52 billion in combined assets under management. This investment management firm delivered a staggering 170% return on investment in the year 2020. Ark Invest manages several ETFs which include the largest actively managed ETF, ARK Innovation ETF. This ETF has amassed over $17 billion in assets under management. Since its inception, the Ark Innovation ETF has been delivering a consistent 39% return on investment to its investors while outperforming the markets in general. 

Cathie Wood’s Ark Invest believes that innovation should be a part of every investor’s portfolio. This is because the future lies in innovation and technologies that have the potential to change the way we live today. Things like electric vehicles, blockchain, DNA sequencing and robotics are some of the areas that hold immense potential to become huge sectors in the coming future. Therefore, ARK believes that innovation should be a part of your portfolio so that you can capitalize on these long-term trends. ARK has three reasons for its investors to incorporate innovation in their portfolios –

Invest in The Future Today

ARK believes that there are five prominent sectors that are the future. Therefore, ARK offers its investors an opportunity to invest in the future today. While they may not be your conventional investment options, these sectors hold tremendous potential. The five sectors that ARK believes are the future are the following –

Artificial Intelligence

Energy Storage

Robotics

DNA Sequencing

Blockchain Technology

Taking Advantage of Market Inefficiencies

ARK believes in taking advantage of four main market inefficiencies that can allow arbitrage and generate huge returns. These market inefficiencies are usually ignored by traditional fund managers and investors, however, these opportunities hold great potential and must be capitalized. The four market inefficiencies that ARK focuses on are – 

The Market’s Short-Term Time Horizon

Renato Leggi, who is a client portfolio manager at ARK Invest explains how the market’s short-term time horizon presents arbitrage opportunities. “The market easily can be distracted by short-term price movements, losing focus on the long-term effect of disruptive technologies. We believe there is a time arbitrage to take advantage of. ARK seeks opportunities that offer growth over 3-5 years that the market ignores ARK aims to be “Early Adopters” in the markets and seeks to capitalize long term trends in the innovative

ARK believes that innovations cannot be constrained into a single market sector, geography, or area. However, the majority of funds and market participants focus only on mainstream investment areas or sectors. That is why ARK constantly searches for opportunities across several areas and applies cross-sector investing methods to benefit from changes all across the horizon.

The Passive Public Markets

According to ARK, inventors primarily focus on the private markets, while at the same time, public markets have increasingly gone passive. Therefore, ARK believes that innovative public companies that are currently the primary investment choice of investors are the most inefficiently priced area of the market.  

The Closed-Off Research and Investment Mentality

ARK believes that finding opportunities in the innovative technologies sector needs an open approach and a deeper understanding of the markets. This allows proper understanding of the convergence across technologies and therefore, they reach their full market potential. Using their Open Research Ecosystem that combines top-down and bottom-up research, ARK is able to identify and monetize on these opportunities. 

Conclusion 

Now, after reading this article, we hope that you have a clear picture about Cathie Wood and ARK Invest. While the financial markets are a vast ocean with several market participants, people like Cathie Wood and her investment management firm, Ark Invest, are amongst the best in this industry.
CONCLUSION:we hope that you have a clear picture about Cathie Wood and ARK Invest. While the financial markets are a vast ocean with several market participants, people like Cathie Wood and her investment management firm, Ark Invest, are amongst the best in this industry. As Cathie Wood shares “We’re all about finding the next big thing. Those hewing to the benchmarks, which are backwards looking, are not about the future. They are about what has worked. We’re all about what is going to work”. We hope that this article provided you with value. If you’re interested in learning more about the stock market and finance, then make sure to visit Jeremy’s YouTube Channel “Financial Education” for more such interesting content. Happy investing!